<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
THE HARPER GROUP, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 9, 1995, 10:30 A.M.
TO THE STOCKHOLDERS:
Please be advised that the Annual Meeting of Stockholders of The Harper
Group, Inc. will be held at the office of the Company, 260 Townsend Street, San
Francisco, California, on Tuesday, May 9, 1995, at 10:30 a.m. for the following
purposes:
(1) To elect two Class I directors.
(2) To transact such other business as may properly come before the
meeting.
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 22, 1995, will be entitled to vote at the meeting and any adjournment
thereof.
San Francisco, California
April 3, 1995
By Order of the Board of Directors
ROBERT H. KENNIS
General Counsel and Secretary
STOCKHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN THE ENCLOSED
PROXY AS PROMPTLY AS POSSIBLE.
<PAGE> 3
THE HARPER GROUP, INC.
260 TOWNSEND STREET
SAN FRANCISCO, CALIFORNIA 94107
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of The Harper
Group, Inc. (the "Company") to be used at the Annual Meeting of Stockholders on
May 9, 1995, for the purposes set forth in the foregoing notice. This proxy
statement and the enclosed form of proxy were first sent to stockholders on or
about April 3, 1995.
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. Any stockholder signing a proxy in the form accompanying
this Proxy Statement has the power to revoke it prior to or at the Annual
Meeting. A proxy may be revoked by a writing delivered to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy signed by the
person who signed the earlier proxy, or by attendance at the Annual Meeting and
voting in person.
VOTING SECURITIES
Only stockholders of record on the books of the Company as of 5:00 P.M.,
March 22, 1995, will be entitled to vote at the Annual Meeting.
As of the close of business on March 22, 1995, there were outstanding
16,142,916 shares of Common Stock of the Company, entitled to one vote per
share. The holders of a majority of the outstanding shares of the Common Stock
of the Company, present in person or by proxy, will constitute a quorum for the
transaction of business at the Annual Meeting or any adjournment thereof.
Votes cast by proxy or in person at the Annual Meeting will be tabulated by
the election inspectors appointed for the meeting and will determine whether or
not a quorum is present. The election inspectors will treat abstentions as
shares that are present and entitled to vote for purposes of determining the
presence of a quorum, but as unvoted for purposes of determining the approval of
any matter submitted to the stockholders for a vote. If a broker indicates on
the proxy that it does not have discretionary authority as to certain shares to
vote on a particular matter, those shares will not be considered as present and
entitled to vote with respect to that matter.
ELECTION OF DIRECTORS
The Certificate of Incorporation and By-laws of the Company provide for a
Board of Directors consisting of not less than three members, divided into three
classes. The size of the Board of Directors may be determined subject to the
foregoing minimum from time to time by the Board of Directors of the Company.
The size of the Board of Directors has currently been established at six.
Directors elected into a class at the annual meeting of stockholders in
each year serve three-year terms and until their successors have been duly
elected. Directors appointed by the Board of Directors of the Company to fill
vacancies or newly created directorships serve for the remainder of the term of
the class to which they are appointed. The Class I directors elected at the
Annual Meeting will serve until the 1998 Annual Meeting; Class III directors
elected at last year's Annual Meeting will serve until the 1997 Annual Meeting;
and Class II directors elected at the 1993 Annual Meeting will serve until the
1996 Annual Meeting.
The persons named below are the nominees to serve as Class I directors
until the 1998 Annual Meeting of Stockholders and until their successors have
been elected or until death, retirement, resignation or removal. Mr. Gibert
presently serves as a Class I director. Mr. Holman is not presently a member of
the Board.
<PAGE> 4
In the absence of instructions to the contrary, shares represented by the
proxy will be voted and the proxies will vote for the election of such nominees
to the Board of Directors. If such nominees are unable or unwilling to be a
candidate for the office of director at the date of the Annual Meeting, or any
adjournment thereof, the proxies will vote for such substitute nominee as shall
be designated by the proxies. The management of the Company has no reason to
believe that either of such nominees will be unable or unwilling to serve if
elected a director. Set forth below is certain information concerning the
nominees which is based on data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST DIRECTOR
NOMINEES FOR DIRECTOR AGE FIVE YEARS AND OTHER INFORMATION SINCE
------------------------- --- ---------------------------------------------------- ----------
<S> <C> <C> <C>
Peter Gibert............. 52 Chairman of the Board of Directors and Chief 1992
Executive Officer. From February 1984 to May 1991,
Mr. Gibert was President and Chief Executive Officer
of Darrell J. Sekin and Co. (international freight
forwarder).
Edwin J. Holman.......... 48 President and Chief Operating Officer of Woodward
and Lothrop, Inc., (department stores located in the
Mid-Atlantic region). From 1981 to 1993, Mr. Holman
was an officer of Carter Hawley Hale Stores, Inc.,
most recently Vice Chairman and Chief Operating
Officer.
</TABLE>
Set forth below is certain information concerning the other directors which is
based on data furnished by them.
<TABLE>
<CAPTION>
SERVED AS
BUSINESS EXPERIENCE DURING PAST DIRECTOR
CONTINUING DIRECTORS AGE FIVE YEARS AND OTHER INFORMATION SINCE
------------------------- --- ---------------------------------------------------- ----------
<S> <C> <C> <C>
Ray C. Robinson, Jr...... 74 Private businessman. Mr. Robinson served as 1971
Secretary of the Company from 1971 until January
1986.
Wesley J. Fastiff........ 62 President of Littler, Mendelson, Fastiff, Tichy & 1971
Mathiason, a law firm which was retained by the
Company to perform legal services in 1994.
Frank J. Wezniak......... 62 President and Chief Executive Officer of Karri 1987
Technology, Inc. (manufacturer of information
collection systems) since 1994. From 1987 to 1992,
Mr. Wezniak was President of Computer Identics
(manufacturer of bar code identification and data
collection systems).
John M. Kaiser........... 55 Private businessman and real estate developer. From 1993
1979 to 1988, Mr. Kaiser was President of Expeditors
International of Washington, Inc. (international
freight forwarder).
</TABLE>
FURTHER INFORMATION CONCERNING
THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
During 1994, the Board of Directors held seven meetings. The Company has an
Audit Committee, a Strategic Planning Committee, a Human Resources and
Compensation Committee and an Acquisitions and Mergers Committee, but does not
have a Nominating Committee.
The members of the Audit Committee are Frank J. Wezniak (Chairman), Ray C.
Robinson, Jr. and Wesley J. Fastiff. Among the functions performed by the Audit
Committee are to make recommendations to the Board of Directors with respect to
the engagement or discharge of independent auditors, to review with the
independent auditors the plan and results of the auditing engagement, to review
the Company's auditing procedures and system of internal accounting controls and
to make inquiries into matters within the scope of its functions. During 1994,
the Audit Committee held six meetings.
The members of the Strategic Planning Committee are John M. Kaiser
(Chairman), John H. Robinson and Peter Gibert. The principal function of the
Strategic Planning Committee is to assist in the development
2
<PAGE> 5
of long-term strategic plans for the Company's business. During 1994, the
Strategic Planning Committee held one meeting.
The members of the Human Resources and Compensation Committee are Wesley J.
Fastiff (Chairman), Ray C. Robinson, Jr., Frank J. Wezniak and John M. Kaiser.
Among the functions of the Human Resources and Compensation Committee are to
review and make recommendations to the Board of Directors concerning the
compensation of the key management employees of the Company and to administer
the Company's stock option plans. During 1994, the Human Resources and
Compensation Committee held six meetings.
The members of the Acquisitions and Mergers Committee are John M. Kaiser
(Chairman), Peter Gibert and Ray C. Robinson, Jr. Among the functions of the
Acquisitions and Mergers Committee are to review and make recommendations to the
Board of Directors concerning proposed or potential acquisitions, mergers, joint
ventures, or other business combinations, and to consult with management
regarding acquisition strategy. During 1994, this Committee held one meeting at
which it reviewed proposals to acquire both domestic and overseas companies.
Effective in May 1995, John H. Robinson will serve as Chairman Emeritus of
the Company. It is expected that Mr. Robinson will be available to consult with
the Board of Directors in his capacity as Chairman Emeritus.
COMPENSATION OF DIRECTORS
Directors are paid directors fees consisting of $13,000 per year and $750
for each Board meeting attended. Directors who attend meetings of the Audit,
Strategic Planning or Human Resources and Compensation Committee receive an
additional $500 for each meeting. In addition, the Company has a Stock Option
Plan for non-employee directors pursuant to which Messrs. Fastiff, Kaiser and
Wezniak have each been granted options to purchase 6,000 shares of Common Stock;
under the terms of this plan, no additional stock options may be granted to any
of the Company's present directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1994, the Company retained the law firm of Littler, Mendelson,
Fastiff, Tichy & Mathiason to perform legal services for it. Mr. Fastiff, a
director of the Company and a member of the Human Resources and Compensation
Committee, serves as president of Littler, Mendelson, Fastiff, Tichy &
Mathiason.
3
<PAGE> 6
EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The compensation paid to the Company's Chief Executive Officer and four
other most highly compensated executive officers for services in all capacities
to the Company and its subsidiaries during the last three fiscal years is set
forth below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- AWARDS
OTHER -------------
ANNUAL SECURITIES ALL OTHER
COMPENSA- UNDERLYING COMPENSA-
NAME AND PRINCIPAL POSITION YEAR($) SALARY($) BONUS($) TION($)(1) OPTIONS(#) TION($)(2)
--------------------------------- ------- --------- -------- --------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert..................... 1994 $ 240,000 $150,000 -- 37,500(4) $4,700
President since May 1991, and 1993 $ 240,000 $ 43,000 -- -- $5,500
Chief Executive Officer since 1992 $ 224,000 $ 43,000 $47,946(3) -- $6,850
June 1992
Stuart O. Keirle................. 1994 $ 145,300 $ 30,000 -- 5,000 $4,700
Vice President 1993 $ 135,800 $ 40,000 -- -- $3,000
1992 $ 135,800 $ 35,000 -- -- $3,770
Patrick Morrison................. 1994 $ 150,000 -- -- 7,000 $4,500
Vice President, 1993 $ 87,500 $ 17,500 -- 10,000 --
Chief Information Officer 1992 -- -- -- -- --
Martin R. Collins................ 1994 $ 150,000 $ 50,000 -- 5,000 $4,700
Vice President 1993 $ 150,000 $ 40,000 -- 10,000(5) $3,300
1992 $ 110,400 $ 35,000 -- 30,000(5) $3,070
Robert H. Kennis................. 1994 $ 130,000 $ 50,000 -- 17,500 $4,700
Vice President and General 1993 $ 127,000 $ 40,000 -- 8,500(6) $2,700
Counsel 1992 $ 120,400 $ 27,500 -- 3,500(6) $1,760
</TABLE>
---------------
(1) While the named executive officers enjoy certain perquisites, for fiscal
years 1992, 1993 and 1994 these did not exceed the lesser of $50,000 or 10%
of each officer's salary and bonus except for the amounts referenced in
footnote 3 below.
(2) The amounts shown consist of Company contributions under the Company's
Profit Savings Plan which has been qualified under sections 401 and 501 of
the Internal Revenue Code of 1986, as amended, and covers employees who
voluntarily enroll in the Plan the quarter after completing six months of
continuous service with the Company.
(3) Includes directors fees and relocation expenses.
(4) Consists of options held by Mr. Gibert to purchase 37,500 shares which were
granted in 1991 and repriced during 1994.
(5) Includes options granted in 1992 to Mr. Collins to purchase 10,000 shares
which were repriced during 1993.
(6) Includes options granted in 1992 to Mr. Kennis to purchase 3,500 shares
which were repriced during 1993.
4
<PAGE> 7
OPTIONS GRANTED TO EXECUTIVE OFFICERS
The following table sets forth certain information regarding stock options
granted during 1994 to the executive officers named in the foregoing Summary
Compensation Table.
OPTION GRANTS
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF
NUMBER OF STOCK PRICE
SECURITIES PERCENT OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OR OPTION TERM(4)
OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION -------------------
NAME GRANTED(1) FISCAL YEAR ($/SH)(2) DATE(3) 5%($) 10%($)
------------------------- --------- ---------------- ----------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Peter Gibert............. 37,500(5) N/A $16 1999 286,500 686,250
Stuart O. Keirle......... 5,000 1.1% $13 2002 31,050 74,350
Patrick Morrison......... 7,000 1.5% $13 2002 43,470 104,090
Martin R. Collins........ 5,000 1.1% $13 2002 31,050 74,350
Robert H. Kennis......... 17,500 3.8% $13 2002 108,675 260,225
</TABLE>
---------------
(1) All options granted in fiscal 1994 are exercisable in annual increments of
25%, commencing one year from date of grant. Under the terms of the
Company's stock option plans, the Human Resources and Compensation Committee
retains discretion, subject to plan limits, to modify the terms of
outstanding options.
(2) All options were granted at fair market value at date of grant.
(3) All options granted in fiscal 1994 were granted for a term of eight years.
(4) Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% and 10%
rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if any,
of the Company's stock price. Actual gains, if any, on stock option
exercises are dependent on the future performance of the common stock as
well as the optionholder's continued employment through the vesting period.
The potential realizable value calculation assumes that the optionholder
waits until the end of the option term to exercise the option.
(5) Consists of options granted in May 1991 to Mr. Gibert which were repriced
during 1994.
REPORT OF THE HUMAN RESOURCES AND COMPENSATION COMMITTEE ON REPRICING OF OPTIONS
The Human Resources and Compensation Committee (the "Committee") considers
stock options to be an important compensation tool for motivating and retaining
key executives. During 1993, management advised the Committee that the
effectiveness of certain stock options previously granted on March 23, 1992 to
the Company's employees had been diminished as a result of the decline in the
price of the Company's stock below $22 per share, the price at which such
options had been previously granted. The Committee considered this problem and
concluded that such options should be repriced in order to achieve their purpose
of providing a long-term incentive to key employees, most of whom were employed
in field offices in operations and sales positions. At its meeting held on
December 14, 1993, the Committee determined that the most effective way to
address the problem and to realign the interests of the options holders with
those of the Company's current stockholders would be to reduce the exercise
price of the outstanding options granted on March 23, 1992 to the then
prevailing market value. Accordingly, on December 14, 1993, the Company amended
the terms of outstanding option agreements governing an aggregate of 146,450
shares to reduce the exercise price from $22
5
<PAGE> 8
to $16. Among the optionees whose options were repriced were two executive
officers: Messrs. Collins (options to purchase 10,000 shares) and Kennis
(options to purchase 3,500 shares).
At its meeting on July 11, 1994, the Committee determined that options to
purchase an aggregate of 37,500 shares of Common Stock which had been granted to
Peter Gibert, the Chief Executive Officer of the Company, in May 1991 should be
amended to reduce the exercise price from $19 per share to $16 per share. These
options were not repriced in December 1993 because at that time only stock
options granted on March 23, 1992 were considered for repricing since the
exercise price of those options was substantially below market. Repricing of Mr.
Gibert's stock options was later considered when reviewing Mr. Gibert's
compensation and was deemed appropriate in view of his performance.
February 27, 1995 Human Resources and Compensation Committee
WESLEY J. FASTIFF, Chairman
FRANK J. WEZNIAK
RAY C. ROBINSON, JR.
JOHN M. KAISER
Prior to December 1993, the Company had not previously repriced options to
purchase stock during the prior ten years. Set forth below is certain
information regarding the repricing of options held by the three executive
officers whose options were repriced.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
MARKET PRICE EXERCISE OPTION TERM
NUMBER OF OF STOCK AT PRICE REMAINING
OPTIONS/SARS TIME OF AT TIME OF NEW AT DATE OF
REPRICED OR REPRICING OR REPRICING OR EXERCISE REPRICING OR
NAME DATE AMENDED(#) AMENDMENT($) AMENDMENT($) PRICE($) AMENDMENT
------------------------ --------- ------------ ------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Martin R. Collins....... 12/14/93 10,000 $16.00 $22.00 $16.00 6.25 years
Robert H. Kennis........ 12/14/93 3,500 $16.00 $22.00 $16.00 6.25 years
Peter Gibert............ 7/11/94 37,500 $13.25 $19.00 $16.00 4.75 years
</TABLE>
There were no option exercises during 1994 by any of the executive officers
listed. The following table sets forth certain information with respect to stock
options held by each of the listed executive officers as of December 31, 1994.
YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY
OPTIONS AT FY-END(#) OPTIONS AT FY-END($)
------------------------- -------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------------------------------------------------------ -------------------------
<S> <C> <C>
Peter Gibert....................... 37,500/-- --/--
Stuart O. Keirle................... 18,375/ 6,125 108,822/19,609
Patrick Morrison................... --/17,000 --/29,250
Martin R. Collins.................. --/35,000 --/33,750
Robert H. Kennis................... 5,625/27,875 29,295/60,390
</TABLE>
EMPLOYMENT AGREEMENTS
The Company has employment agreements with two of the executive officers
named in the foregoing compensation table. The Company has an employment
agreement with Peter Gibert, expiring in May 1996, pursuant to which Mr. Gibert
is employed as the Company's President and Chief Executive Officer. Under the
terms of this agreement, Mr. Gibert is guaranteed a minimum salary of $16,000
per month subject to future increases in the discretion of the Board of
Directors and a bonus equal to the greater of (i) $43,000 or (ii) 10% of the
amount by which the Company's consolidated net profit before taxes (as
particularly defined in the agreement) exceeds 110% of the consolidated profit
before taxes for the prior year. The agreement with
6
<PAGE> 9
Mr. Gibert provides for severance pay equal to six months salary plus the
minimum bonus of $43,000 in the event that the agreement expires at the end of
its term and Mr. Gibert's employment with the Company is not continued. Further
details regarding Mr. Gibert's compensation are described in the report of the
Human Resources and Compensation Committee set forth below. The Company has an
employment agreement with Stuart Keirle expiring in September 1997 pursuant to
which Mr. Keirle is employed as a Vice President. Under the terms of this
agreement, Mr. Keirle is guaranteed a minimum base salary of $8,334 per month
subject to annual review in accordance with existing corporate policies and a
bonus to be determined by the Board of Directors.
Effective in January 1993, the Company entered into a Consulting Agreement
with John H. Robinson which provided for Mr. Robinson to serve as a consultant
to the Company until December 31, 1994. Under this Agreement, Mr. Robinson was
paid $10,000 per month, and received certain other benefits including the use of
an office in the Company's headquarters. The Company ceased making monthly
payments to Mr. Robinson upon the expiration of the Consulting Agreement on
December 31, 1994. The Company remains obligated to provide Mr. Robinson with
certain health insurance benefits until December 31, 1997. Commencing in January
1995, Mr. Robinson has been leasing certain premises in the Company's
headquarters building at fair market rent.
TRANSACTIONS WITH THE COMPANY
In February 1989, Peter Gibert executed a Promissory Note (the "Note") in
the principal amount of $717,944 in favor of Darrell J. Sekin & Co. ("Sekin").
The Note provides for bi-monthly payments of principal and interest (accruing
annually at 9.25%) and a maturity date of February 15, 1994. Payments under the
Note terminated in May 1991 when the Company acquired all of the outstanding
shares of Sekin. In June 1993, the Company agreed to defer the payments of
principal and interest until the termination of the Employment Agreement between
Mr. Gibert and the Company which is described in the Human Resources and
Compensation Committee Report on Executive Compensation. Additionally, the
interest rate on the Note was reduced to 5% effective June 1993. As of December
31, 1994, unpaid principal and accrued interest on the Note aggregated $328,555.
In August 1994, the Company agreed to forgive annually $50,000 of the
amount due under the Note on the condition that Mr. Gibert is an employee of the
Company and the Company has been profitable in the previous twelve months. The
entire balance owed under the Note will be forgiven in the event Mr. Gibert's
employment with the Company is terminated, unless such termination is with cause
in which case the entire balance becomes due and owing. Forgiveness of amounts
due under the Note will commence in 1995.
HUMAN RESOURCES AND COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The Human Resources and Compensation Committee (the "Committee") of the
Board of Directors is composed entirely of independent directors, none of whom
is an officer or employee of the Company or any of its subsidiaries. The
Committee is responsible for establishing the Company's compensation policies,
administering the Company's stock option plans, and reviewing the Company's
salary, profit sharing and incentive arrangements generally. In addition, the
Committee reviews the compensation levels of the executive officers of the
Company, including the Chief Executive Officer, and evaluates their performance.
The Committee reviews with the Board the significant aspects of compensation for
the executive officers of the Company.
In discharging our responsibilities as members of the Human Resources and
Compensation Committee, our objective is to establish policies which will
enhance the long-term performance and growth of the Company, enable the Company
to attract and retain outstanding executives and employees, and provide
meaningful incentives without subjecting the Company to excessive costs. The
Company has historically relied principally on cash payments in the form of
salary and incentive payments to motivate its key executives and managers, and
secondarily on employee stock options.
7
<PAGE> 10
The compensation policy of the Company, which is endorsed by the Committee,
is that a substantial portion of the annual compensation of each officer should
relate to and be contingent upon the performance of the Company, as well as the
individual contribution of each officer. As a result, a substantial portion of
each executive officer's compensation is "at risk" in the form of incentive
compensation, which is awarded based on performance of the individual and the
Company (or the appropriate business unit managed by the executive officer) for
the year in question. The determination of incentive compensation is based on a
qualitative evaluation of the individual's contribution to the Company's
performance, and is also tied to meeting or exceeding business plan income
projections.
Amendments to Section 162(m) of the Internal Revenue Code have eliminated
the deductibility of most compensation over a million dollars in any given year.
The Committee believes that it is highly unlikely that any of the Company's
executive officers would be eligible at any time in the foreseeable future to
receive compensation of more than a million dollars. However, the Committee
believes that it is important to retain the flexibility to maximize the
Company's tax deductions. Accordingly, it will be the policy of this Committee
to consider the impact, if any, of Section 162(m) on the Company and to document
as necessary specific performance goals and take all other reasonable steps in
order to seek to preserve the Company's tax deductions.
Peter Gibert's base salary for 1994 was based on his rights under his
five-year employment agreement with the Company dated May 21, 1991 (the
"Employment Agreement") described in the Company's proxy statement. The
Employment Agreement established Mr. Gibert's initial and minimum annual base
salary at $192,000, subject to annual review by the Committee. The Human
Resources and Compensation Committee concluded that it was appropriate to
increase Mr. Gibert's salary to $20,000 per month effective May 1, 1992 -- an
increase of $4,000 per month from the minimum level specified in the Employment
Agreement. In order to compensate Mr. Gibert for the additional tax obligation
resulting from the annual forgiveness of the Promissory Note obligation
discussed above under the caption "Transactions with the Company," in August
1994 Mr. Gibert's salary was increased by $44,000 in every year the Note is
forgiven. In addition, the Employment Agreement provides that for 1994 Mr.
Gibert is entitled to receive a bonus equal to the greater of (i) $43,000 or
(ii) 10% of the amount by which the Company's "consolidated net profit before
taxes" (as particularly defined in the Employment Agreement) for 1994 exceeds
110% of the "consolidated net profit before taxes" for 1993. For 1994, the bonus
will be $150,000. Mr. Gibert forfeited additional cash compensation which he
would have been entitled to under the bonus calculation provided for in the
Employment Agreement. In recognition of Mr. Gibert's performance, the Committee
granted Mr. Gibert 32,735 shares of restricted Common Stock. 50% of this
restricted stock vests on January 1, 1996 and the balance vests on January 1,
1997. Vesting is contingent upon Mr. Gibert remaining as an employee or director
of the Company. The Company has not previously granted Mr. Gibert restricted
stock. The Committee believes that this compensation is appropriate given Mr.
Gibert's entitlement under the Employment Agreement, the 56% improvement in
operating income over 1993 and the substantial contributions made by Mr. Gibert
in 1992 and 1993 during which he received the minimum annual bonus of $43,000
provided for in the Employment Agreement.
The perquisites and other benefits received by Mr. Gibert that are reported
in the Summary Compensation Table are provided pursuant to his Employment
Agreement. No stock options have been granted to Mr. Gibert since May 1991.
Options to purchase 37,500 shares of Common Stock were granted to Mr. Gibert
upon the execution of the Employment Agreement in May 1991 at an exercise price
of $19 per share. In August 1994, these stock options were repriced to $16 per
share, as more fully discussed above in our Report on Repricing of Options.
February 27, 1995 Human Resources and Compensation Committee
WESLEY J. FASTIFF, Chairman
FRANK J. WEZNIAK
RAY C. ROBINSON, JR.
JOHN M. KAISER
8
<PAGE> 11
PERFORMANCE GRAPH
The following graph compares the yearly percentage change in the Company's
cumulative total stockholder return on its Common Stock with the cumulative
total return of the NASDAQ Market Index and a peer group index consisting of the
Company, Expeditors International of Washington, Inc., Fritz Companies, Inc.,
Intertrans Corporation, Air Express International Corporation and Airborne
Freight Corporation. Performance graphs for prior years had utilized the same
peer group index -- but had excluded Fritz Companies, Inc., whose Common Stock
did not become publicly traded until October 1992. In order to assure
comparability, the performance graph shown below also shows the cumulative total
return of the prior peer group index (consisting of all of the companies in the
peer group index, except Fritz Companies, Inc.). The performance graph shown
below is not necessarily indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG
THE HARPER GROUP, INC., NASDAQ MARKET INDEX AND
BOTH THE FORMER AND NEW PEER GROUP INDEX LINES
<TABLE>
<CAPTION>
MEASUREMENT PERIOD THE HARPER NASDAQ MARKET PEER GROUP PEER GROUP
(FISCAL YEAR COVERED) GROUP, INC.: INDEX: (FORMER): (NEW):
<S> <C> <C> <C> <C>
1989 100 100 100 100
1990 97 85 92 92
1991 171 136 156 156
1992 125 159 162 162
1993 138 181 188 186
1994 122 177 182 202
</TABLE>
9
<PAGE> 12
OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table indicates, as to each named director and each named
executive officer, and as to all directors and executive officers as a group,
the number of shares and percentage of the Company's Common Stock beneficially
owned as of February 28, 1995.
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED AS
OF FEBRUARY 28, 1995
------------------------------------
NAME NUMBER OF SHARES PERCENT
-------------------------------------------------- ---------------- -------
<S> <C> <C>
Peter Gibert(1)................................... 1,165,203(2)(3)(10) 7.1%
John H. Robinson(1)............................... 1,188,223(4) 7.3%
Ray C. Robinson, Jr.(1)........................... 1,726,247(5) 10.6%
Wesley J. Fastiff................................. 75,433(6)(7) 0.5%
Frank J. Wezniak.................................. 6,685(7) --
John M. Kaiser.................................... 16,000(7) --
Stuart O. Keirle.................................. 19,868(8)(10) --
Martin R. Collins................................. 65(10) --
Patrick Morrison.................................. 300 --
Robert H. Kennis.................................. 6,209(9)(10) --
All directors and officers as a
group (12 persons).............................. 4,205,233 25.8%
</TABLE>
---------------
(1) The address of John H. Robinson, Ray C. Robinson, Jr. and Peter Gibert is
260 Townsend Street, San Francisco, California 94107. John H. Robinson and
Ray C. Robinson, Jr. are brothers. With the exception of John H. Robinson,
Ray C. Robinson, Jr. and Peter Gibert, the only stockholders who are known
by the Company to own beneficially more than 5% of the Company's Common
Stock are RCM Capital Management which owned beneficially 815,000 shares
(5%) on December 31, 1994, and Westport Asset Management, Inc. which owned
beneficially 1,099,350 shares (6.7%) on December 31, 1994. The address of
RCM Capital Management is Four Embarcadero Center, Suite 2900, San
Francisco, California 94111; and the address of Westport Asset Management,
Inc. is 235 Riverside Ave., Westport, Connecticut 06880.
(2) Excludes 147,451 shares (0.9%) held by Jeffrey L. Oerke, as trustee of an
irrevocable trust for the benefit of the children of Peter Gibert and their
descendants. As to such excluded shares, Mr. Gibert disclaims any
beneficial interest.
(3) Includes 37,500 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1995.
(4) Excludes 550,000 shares (3.4%) held by First Interstate Bancorp, as trustee
of an irrevocable trust for the benefit of the children of John H. Robinson
and their descendants. As to such excluded shares, Mr. Robinson disclaims
any beneficial interest.
(5) Consists of 1,726,247 shares held by Ray C. Robinson, Jr. and Craig Howard
Robinson as co-trustees of a revocable trust for the benefit of Ray C.
Robinson, Jr., his wife, and their descendants.
(6) Includes 69,433 shares held by Wesley J. Fastiff and Bonnie B. Fastiff as
co-trustees of a revocable trust for the benefit of Wesley J. Fastiff, his
wife and their descendants.
(7) Includes 6,000 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1995.
(8) Includes 18,375 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1995.
(9) Includes 5,625 shares issuable upon exercise of outstanding options
exercisable within 60 days of February 28, 1995.
(10) Includes shares contributed into the officer's Section 401(k) Plan which
were previously held by the Company's profit sharing plan.
10
<PAGE> 13
SECTION 16(A) INFORMATION
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission.
Officers, directors and greater than ten-percent shareholders are required by
SEC regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons that no Forms 5 were
required for those persons, the Company believes that, during the period from
January 1, 1994 to December 31, 1994 all filing requirements applicable to its
officers, directors, and greater than ten-percent beneficial owners were
complied with, except that Ray C. Robinson, Jr. filed a Form 5 with respect to
10,000 shares gifted by him in June 1994 which was not timely reported.
AUDITORS
Deloitte & Touche LLP, independent certified public accountants, serves as
the Company's principal accountants. Representatives of Deloitte & Touche LLP
will be present at the Annual Meeting with the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions.
OTHER MATTERS
As of the date of this Proxy Statement, there are no other matters which
management intends to present or has reason to believe others will present to
the meeting. If other matters properly come before the meeting, those who act as
proxies will vote in accordance with their judgment.
STOCKHOLDER PROPOSALS
If any stockholder intends to present a proposal for action at the
Company's 1996 Annual Meeting and wishes to have such proposal set forth in
management's proxy statement, such stockholder must forward the proposal to the
Company so that it is received on or before December 4, 1995. Proposals should
be addressed to the Company at 260 Townsend Street, San Francisco, California
94107, Attention: Corporate Secretary.
COST OF SOLICITATION
All expenses in connection with the solicitation of this proxy, including
the charges of brokerage houses and other custodians, nominees or fiduciaries
for forwarding documents to stockholders, will be paid by the Company.
Dated: April 3, 1995.
By Order of the Board of Directors
ROBERT H. KENNIS, Secretary
11
<PAGE> 14
PROXY
THE HARPER GROUP, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
MAY 9, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Peter Gibert and Robert H. Kennis, or either
of them, each with power of substitution, as proxies of the undersigned, to
attend the Annual Meeting of Stockholders of The Harper Group, Inc. to be held
at the office of the Company at 260 Townsend Street, San Francisco,
California, on May 9, 1995, at 10:30 A.M., and any adjournment thereof, and to
vote the number of shares the undersigned would be entitled to vote if
personally present on the following:
(Continued, and to be signed, on reverse side)
STOCKHOLDERS ARE URGED TO MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY IN
THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 15
(continued from other side)
Please mark
/X/ your votes
as this
(1) The election of two Class I Directors for a three year term.
Peter Gibert
Edwin J. Holman
(Instruction: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided below)
FOR ALL nominees / / WITHHOLD AUTHORITY / /
listed below to vote for all
(except as marked nominees listed below
to the contrary below)
(2) In their discretion, upon any and all such other matters as may properly
come before the meeting or any adjournment thereof.
FOR / / AGAINST / / ABSTAIN / /
This proxy will be voted as directed. In the absence of contrary directions,
this proxy will be voted FOR the election of the directors listed above.
Dated , 1995
-----------------------
-------------------------------------
-------------------------------------
-------------------------------------
SIGNATURE(S)
The signature should correspond exactly with the name appearing on the
certificate evidencing your Common Stock. If more than one name appears, all
should sign. Joint owners should each sign personally.
